EBRD funds Mongolia’s first wind farm

The European Bank for Reconstruction and Development has provided a $42.4m loan for the Salkhit wind farm and committed $4.4m in equity to Clean Energy, a company created to build the wind farm.

The European Bank for Reconstruction and Development (EBRD) is extending a $42.4 million loan as part of the project financing for the Salkhit wind farm in Mongolia, the country’s first wind energy project.

The EBRD is also committing $4.4 million in equity to Clean Energy, which has been created to build the wind farm and is 25 percent-owned by the EBRD and 75 percent-owned by Newcom, a Mongolian holding company for investments in a range of sectors including technology and aviation.

Other participants in the project include General Electric, which is supplying 31 1.6-megawatt (MW) wind turbines to the site, and FMO, the Netherlands Development Finance Company. 

The 50MW farm will be built about 70 kilometres away from the Mongolian capital, Ulaanbaatar. It will provide around 5 percent of the country’s electricity needs, which are mainly met by coal-fired plants currently. Mongolia’s National Renewable Energy programme stipulates that a quarter of the country’s energy should come from renewable sources by 2020. 

Mongolia’s “strong winds can provide a lot of electricity for the growing needs of the country which is hoping to diversify its sources of power supply,” said Nandita Parshad, EBRD director for power and energy, in a statement. “We hope this transaction paves the way for increased private interest in the renewable power sector which can reduce Mongolia’s dependence on coal and its carbon footprint and will contribute to Mongolia’s sustainable development.”

The EBRD provided technical assistance to the Mongolian government – which was funded by the government of Japan – as it developed its regulatory framework for renewable energy. The EBRD also received funding from the government of Luxembourg for the Salkhit wind farm’s environmental and social impact assessment.